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Ethereum Stake Reward Cap Proposal Sparks DeFi Backlash

Guavy AI Editorial Team
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ETH AAVE
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A proposal to cap staking rewards on Ethereum has sparked backlash from DeFi players. EIP-8361, submitted by researcher Justin Drake and his team, aims to remove staking rewards if staked ETH surpasses half of its overall circulating supply.

The proposal claims that this would make ETH a store of value by making it deflationary and help solo stakers. However, DeFi leaders such as Stani Kulechov, CEO of Aave, have rejected the inflation plan, stating that it would derail institutional adoption and affect solo stakers with 'unpredictable yield.'

Mike Sligadze, CEO of EtherFi, echoed similar concerns, questioning how a 0.8% reduction in issuance would boost ETH value at the expense of the DeFi ecosystem.

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